We created a transparent pharmacy benefit management company. Here’s why

ByMichael A. Perry

November 14, 2018

Adobe

Although pharmacy benefit managers (PBMs) have been part of American health care since the 1970s, how they make money is a mystery for many people outside of the industry. Calls for transparency have resounded in the media and at all levels of government with growing frequency in recent years. Often, pharmacy benefit managers respond by touting their transparent programs, but within the industry, “transparency” can mean many different things, making it a shell game.

My colleagues and I realized that the opacity of pharmacy benefit managers was bad for patients — and for business. So, we started BeneCard PBF, a pharmacy benefit manager that focuses on people, not profits. Over the last 10 years we have grown the company by defining transparency in a meaningful way that serves patients’ needs, not through mergers and acquisitions, which run the risk of taking our focus off patients in favor of growing company profits.

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Adam, thanks for your comment. To your point, the healthcare industry and more specifically, PBM problems, can certainly be viewed from many different angles, including financial angles and clinical angles. We have been attacking the issues from an alignment of interest perspective – thankfully, in consultation with the BeneCard PBF team, our plan sponsors have elected plan designs that proportionally advantage their membership. We have seen many PBMs truly focus on the financials in ways that relegate them to bank-like functions. But when PBMs focus on the clinical appropriateness of medications, they are able to put the patient first and ultimately improve health which lowers costs.

That’s part of what a true pay-for-performance model does. It encourages an approach based not only on rebates, but on appropriate clinical utilization and removal of barriers to access for patients.
We believe that in a pay-for-performance model, the PBM must work with plan sponsors to establish a plan design from which members will reap the benefits. This plan design should eliminate the use of inappropriate medications, and feature programs that reward adherence. It should cover medications based on clinical merit and value to the patient, not rebate amounts. As a result, members benefit financially and personally through improved health and lower medical expenses overall.

Kudos for providing a marketplace option for plan sponsors that want a transparent PBM.

However, the article ignores the abuse of rebates by plan sponsors. Many do not share the savings with the patients whose prescriptions generated those rebates. Beneficiaries with prescription drug deductibles and coinsurance face higher out-of-pocket costs. That’s because their coinsurance amounts and payments within the deductible phase are based on a drug’s undiscounted, pre-rebate list price. IMHO, this is a bigger problem than PBM overcompensation.